Malloy Forced To Shift From Rebate To Reality

The end of the legislative session has featured an unusual amount of gear-shifting by the state's leading policy-makers. The most notable came last week when reality forced Gov. Dannel P. Malloy to abandon his $55-a-person income tax refund under pressure from falling tax receipts that accompany a stagnant state economy.

A reduction in rates always seems more sensible than a one-shot refund, but that would require a steadier long-term flow of money into state coffers. One of the challenges of leading Connecticut remains these frequent swings and reversals of fortune. The state, for example, has yet to recover from the 10,400 jobs it lost in January.

That $55 rebate would have made an expensive talking point for Malloy on the campaign trail. There were always doubts among legislators in both parties that the money would be there to finance it. Constructing a $40 billion two-year state budget requires a certain amount of finger-crossing, and it has not worked out for Malloy this year.

State Senate Minority Leader John McKinney, R-Fairfield, who is seeking his party's nomination for governor, pointed out the state's declining revenue prospects a few days before Malloy announced the tax refund was dead. Malloy's office's reaction was fierce and disproportionate. Malloy's spokesman accused McKinney of rooting for failure.

A prudent leader would have recognized that McKinney's call to confront reality was nothing unusual — as the General Assembly confronted reality with the approach of the May 7 conclusion of the legislative session. All that was missing from Malloy's spokesmen's rant on McKinney was the unfortunate phrase "shameless grandstanding." That's what they often throw at anyone who disagrees or criticizes Malloy.

The disappointing news that the state's economy is not performing as predicted caused former President George W. Bush to come in for a kicking from Malloy's budget director, Benjamin Barnes. Tax cuts that Bush pushed through Congress more than a decade ago with bipartisan support are somehow at the root of the state's current shortfall, by Barnes' jaundiced reckoning. Certainly, the administration was aware of changes in the capital gains tax when it made its budget projections.

Barnes has picked up the bad habit of becoming a political brawler at the expense of serious policy-making. It's too bad, because he initially seemed like a serious and steady figure when he joined the Malloy administration at its start in 2011.

Adjustments to the state budget under changing circumstances get a lot of attention in public and private. There are plenty of other proposals making quiet progress in the final days of the legislative session. I'll share one example laden with the doctrine of unintended consequences.

It may seem innocuous on its surface, though chipping away at the barriers that keep the tax department from sharing information should always raise their own alarms. This one is worse. UConn would have the right to collect patient debts by reporting them to the state Department of Revenue Services.

Here's the public health problem. As this policy becomes known among people with rickety personal finances seeking health care, some patients are going to avoid UConn and head for hospitals that can't use the state tax department as a bill collector. Burdened urban hospitals in Hartford, New Britain, Bristol and Waterbury will have to provide medical care to a disproportionate number of patients who cannot pay. Score one for the state hospital in leafy, affluent Farmington. The Connecticut Hospital Association is so weak that this ill-considered proposal could become law.

If legislators are in a mood to do something useful for UConn and the public good, they should make the University of Connecticut Foundation subject to the Freedom of Information Act and oversight by the state auditors. Taxpayers help fund the foundation each year but have no power through their government to subject it to normal and important safeguards to scrutinize its operation. Who could object to that? We know who — and on this they have had their way for too long.

Kevin Rennie is a lawyer and a former Republican state legislator. He can be reached at kfrennie@yahoo.com.